‘Very worrying’: Furlough crisis set to hit older workers as scheme ends

Furlough: Andy Haldane suggests pay rises may be the answer

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Furlough has provided important support to individuals who may have otherwise lost their jobs as businesses shuttered throughout the pandemic. While the scheme has been extended on a number of occasions to help those impacted by COVID-19, it is scheduled to draw to a close. Despite the extension of lockdown, the Government does not have current plans to continue to pay a proportion of wages of furloughed individuals past the scheduled end date.

From next month, then, Government contributions will drop, meaning employers must take on more of the burden of payment.

But with the end of furlough drawing closer, there is concern about the impact for older workers at this time.

A new report from the Institute for Fiscal Studies has argued the end of the scheme is likely to be particularly tough for older individuals.

It was found those aged 50 to 69-years-old are likely to face a number of unemployment challenges.

Before the pandemic, among all of those unemployed in their later 50s, less than one in three returned to work over the course of a year, compared to about half of those unemployed in their mid 30s.

Indeed, among older workers, the long-term unemployed are also much less likely to re-enter work, than those who recently became unemployed.

The reasons for the struggle to find new work for older workers are varied, but the study found one particular issue is that older workers do not have much recent experience of job hunting.

Over two-thirds of those aged 55 said they had been with their employer for more than five years, and older workers are also less likely to change occupation – a prospect which may now be necessary as a result of the pandemic.

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Laurence O’Brien, a research economist at IFS, and the author of the report, commented on the matter.

He said: “There are a number of reasons that finding new work after the end of the furlough scheme might be challenging for many older jobseekers.

“Many older workers do not have much recent experience of looking for a job. Older workers are also less likely than younger workers to change occupation in normal times – and these transitions may become more important as the economy adjusts after the pandemic.

“It will therefore be important for the government to appropriately support older jobseekers back into the labour market going forwards.”

Another author of the report, Heidi Karjalainen, also a research economist at IFS commented on the situation before the pandemic.

She highlighted that many older workers were looking for lower hours of work and more flexibility as they neared retirement.

However, she also acknowledged this was not an option available to everyone, particularly for those living in more deprived areas, or with lower rates of education.

Ms Karjalainen expressed her hopes that the lessons of the pandemic would be learned to enable more people to have the chance to work flexibly. 

The idea of flexible working is also one which has been stressed by the findings of the report.

Pre-pandemic analysis showed there was a substantial appetite for individuals to have reduced working hours when older.

Some 16 percent of 50 to 69-year-olds who were in paid work wanted to work fewer hours.

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And among full time workers aged 60, still in work one year later, some 10 percent move into part-time employment.

A small proportion of individuals were found to want to work more hours per week, but this is likely to be attributable to low pay or shorter job tenures. 

Emily Andrews, Deputy Director of Evidence at the Centre for Ageing Better, which funded the report, concluded by providing insight.

She said: “The picture is currently very worrying for older workers furloughed or made redundant during the pandemic. 

“This new research shows that even before the pandemic, only a third of unemployed people in their late 50s returned to work within a year. In a competitive job market, many older workers are likely to struggle to get back into work.

“It’s vital then that in the wake of the crisis, the right support is in place to get over-50s back to work and prevent them falling into long-term unemployment – which would risk seeing many fall out of the workforce for good.

“Government must make this group a priority, providing tailored support that takes into the needs of the over-50s and the barriers they may face to finding work. In addition, Government must send a strong message to employers, job coaches and employment support services that over-50s are just as entitled to support as younger workers.”

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